Sometimes, the next money-mission is simply debt pay-off.

Debt, especially consumer debt, can keep you off mission. When all of your future income is committed to servicing debt payments and survival, it is difficult to quickly say ‘yes’ to the unpredictable twists and turns of God’s invitation for you.

Although, debt payments shouldn’t keep you from living on mission, oftentimes the best ‘next step’ towards aligning your money with your calling is severing the restricting agreements you’ve made with debt institutions.

Let’s look at three methods to reach debt pay-off and how to know when to use each method.

Debt Snowball

To Dave Ramsey’s chagrin, the debt snow ball is the mathematically LEAST effective way to pay off debt that we’ll look at today. Dave’s opinion is that “You didn’t do math to get in debt, so why start now?”

I can think of a couple of reasons, first, the easiest and most effective way to fix a mistake is to, repent, (literally, change your mind), which would involve doing something different than you did to get into the problem. You don’t use a shovel to get out of a hole.  

Secondly, the faster you can pay off your debt, and the less money you fork over to the financial institutions the sooner you have money to pour into your mission.

Although the debt snowball isn’t great math, it does have one advantage. Psychology.

How it works: In the debt snowball method, list your debts smallest to largest according to balance, ignoring the interest rate, or type of debt.

Pay minimum payments on every debt except the debt you are ‘working on’, which would be the smallest balance. As you pay off each debt, ‘roll’ the increased cashflow into the next debt. Over time your debt accounts retire quickly, which creates the illusion of quick progress. Although the total balance of debt isn’t going away any quicker than any other pay-off plan would.

 Sometimes, this ‘immediate gratification’ of showing an account being paid off is just the motivation someone needs to stick with it a debt repayment plan.  

Sample Debt Snowball Schedule

What I like about the debt snowball: I’m ultimately in favor of anything that helps someone stay on course and pay off debt. While the debt snowball isn’t mathematically effective, it is easy, clear and frees up excess cashflow quickly.

Building a sense of momentum can help you dig deep to find extra money in your budget that may have seemed insurmountable before you saw progress.

What I don’t like about the debt snowball:I don’t like mental tricks. If we need to ‘trick’ ourself into sticking with a plan, there is probably some heart work that needs done before the money work.

How we use our money is a great indicator of what’s going on in our heart. Do we lack discipline? Purpose? Focus? Are we using spending as a coping mechanism? Perhaps instead of devising a method that acts as a crutch to the sickness in our heart, we should spend time allowing Jesus to heal our heart.

Having a bigger bank account isn’t the goal. Having no debt isn’t the goal. Aligning Jesus’ purpose for our money (and life) with how we use our money is our goal.

Additionally, if you want to get out of debt fast and pay the least in interest over time, this isn’t the method for you.

When to use: If you have started to pay off debt multiple times in the past but stopped, or if you are not quite committed to the idea of paying off debt. This will at least free up cashflow faster than some other methods.

Debt Avalanche

The debt avalanche method focuses on the math. The goal of paying off debt is to stop paying interest to a financial institution. The less money you pay to a financial institution the more money goes directly against the principal balance of your debts and thus, pays off your balance more quickly.

How it Works: In the debt avalanche method, instead of stacking your debts in order of balance due, you will rank your debts by highest interest rate. Like the debt snowball, you will pay minimum payments on all but one account, in this case, the one with the highest interest rate.

 Now, as you reduce your balances you will be lowering the total interest due faster, because the balance with the highest interest rate is getting smaller. The less interest is due the more of your payment goes towards principal.

Sample Debt Avalanche Schedule

What I Like About the Debt Avalanche: This is, mathematically, the quicker way to pay off a collection of debt. The debt avalanche is the more effective way to reach the actual goal, having your debt paid off, without changing the nature of any of your debt.

Think about it this way, the goal is to turn as much of each month’s payment into principal payment as possible. The fastest way to do that is to lower your interest owed each month. That’s why you attack the highest interest debt first.

What I Don’t Like About the Debt Avalanche: Personal finance can be unpredictable. Unlike the debt snowball and debt consolidation (below), this method is the worst to help you free up cashflow. If you happen to have an emergency or need extra money while on the path to pay off debt, this method will help you the least in that situation. Also, in certain situations, like our sample schedule above, the effect is nominal if two similar sized accounts have only marginally different interest rates.

When to use: If you can’t make additional payments to what you are already making towards debt, you can at least accelerate the time it will take you to complete your debt pay-off. If your income is stable and you are committed to paying off the debt and don’t want to ‘use debt’ to get out of debt, this is the preferred method.


Consolidation loans have a bad reputation for good reason. Lots of scammy companies lurk around, moving around individuals’ debt to get them lower “payments” in order to keep them in debt longer than they ever were going to be in the first place.

But that doesn’t mean consolidation can’t help you with your debt pay-off journey. It might surprise you to know that the length of time in debt has a lot more to do about with interest paid than interest rate.

For instance, $200,000 of credit card debt at 20% Annual percentage rate will cost a little over $81,000 in interest over five years. That same $200,000 over a 30-year mortgage at 5.25% will cost you $136,000 in interest!

It’s important when you are analyzing debt consolidation opportunities, that you look at total cost of the loan rather than payment or even interest rate.

How it works: By turning multiple debt accounts into one account and lowering the interest rate you may be able to lower your monthly required payment and save on interest over time.

Again, be sure you are actually saving money and not just spreading your debt repayment over a longer period of time, this will cost you more money in the end. You can calculate your savings by downloading my debt payoff spreadsheet here.

There are two main factors to pay attention to: First, is your weighted average interest rate, which I refer to as a blended interest rate for simplicity.

This is rate helps you determine the minimum interest rate a debt consolidation loan would have to be in order to save money on interest. If your debt consolidation loan rate is less than your blended rate, you are likely able to save money.

Second, is origination or early pay off fees. These fees are essentially interest, so they need to be added into the total cost to pay back a loan.

Keep in mind just because a loan is a five-year loan, doesn’t mean it should take you five years to pay the debt back. You want the flexibility to be able to pay-off early. Be sure to actually READ the loan agreement, not just ask the loan officer if these fees exist.

Sample Debt Consolidation

What I like about Debt Consolidation: Debt consolidation works for disciplined people who will use the excess cashflow for the mission or to pay off the debt early.

In the scenario above, both plans will reach debt pay-off in five years. But with the consolidation loan you can either keep $220/mo for your mission, or add the additional money to your principal payment, hitting your debt pay-off twelve months earlier.

If debt is the limiting factor on what God is inviting you into, debt consolidation could free up the necessary cash to; go on a mission’s trip, make a geographical move, reduce your income or pay extra towards the principal of debt.

If you’re not able to free up cash flow with a debt consolidation loan, you may lower the interest rates and thus the amount of money the financial institution gets each month means more of your payments will go towards principal and you have a fixed worst-case scenario end time for your debt pay-off.

What I don’t like about Debt Consolidation: The biggest drawback is that there is no cashflow increase after the initial consolidation (if there is one at all). Unlike the debt avalanche or debt snowball, debt consolidation takes multiple payments, that go away one-by-one with each account pay off and turn it into one payment that won’t go away until your journey to debt pay-off is complete.

In addition, the complexity of loan terms and the predatory business practices of loan officers pushing these types of loans puts you at risk of making a bad move. If you use the increased cash flow in order to take on more debt, as opposed to pay extra into principal or towards your mission, debt consolidation can work against you instead of for you.

Lastly, if the accounts you pay-off are some of your oldest accounts, you could experience a large credit score decrease, as your length of oldest open account shortens.

When to use Debt Consolidation: If you need extra cash flow to make a move God is calling you into or are committed to debt payment for the long haul, debt consolidation may be right for you.

If you want a fixed plan to debt pay-off and you have a good bit of high interest credit card debt, the interest rate savings may be worth doing a debt consolidation loan even if there is no cashflow savings.

If you’re looking at a debt consolidation and want to know if you’re getting a good deal, you can always email me and ask for some free input.  


As my grandma always used to say, there’s more than one way to skin a cat.

Whether you use a debt snowball, avalanche or consolidation, the journey to pay off debt can be a hard-fought battle, but there is no reason to not use a little math to play ahead.

Simply by utilizing a few banking maneuvers you can free up cashflow or shorten your pay-off time table, retire your debt and Get.On.Mission.

I’ve walked hundreds of people through scenarios like these and I’d love to get you on mission by getting you out of debt. Fill out my debt consolidation worksheet and email it to me for free a free consultation. No upsell. No angle. Let’s get your money on mission!